Fiscal policy: Between Scylla and Charybdis.

Over the next couple of months, the government will have to choose between (1) overshooting the fiscal deficit target, and (2) reducing expenditure if tax revenues disappoint. We remain cautious on FY2018 growth prospects even with a likely “targeted” expenditure increase even as the government

‘Shotgun’ fiscal stimulus.

In our view, the government may want to focus on specific measures to revive growth in the Indian economy rather than the usual approach of higher expenditure on rural economy and infrastructure. Financial and taxation benefits in vital areas of (1) informal economy, (2) jobs and (3) residential real estate may re

The BRICS Summit was largely an uneventful affair this year. Apart from the usual declarations for greater cooperation, hardly anything noteworthy took place. Only the naming of Pakistani terrorist groups by the forum as a cause for violence in the region led to some celebratory ripples, but that was it.

Amidst all the dull news emanating from Xiamen there was also a word about India&

* Progress of monsoon: sub-normal to normal monsoon

–Till September 20, cumulative rainfall was 5.2% below normal with the weekly rainfall 12.4% above normal. On a regional cumulative basis, most of India was in deficient to normal rainfall with parts of central India and north India remaining deficient (slide 4). Out of the 36 sub-divisions acr

Race against time.

The recent slippage in India’s macroeconomic parameters (CAD, GDP growth, inflation) may dampen investment sentiment unless earnings surprise positively. We have been hopeful about India’s strong ‘macro’ translating into economic and earnings over the past 2-3 years but (1) earnings have generally disappointe

SBI Life Insurance is the largest private insurer in terms of NBP generated with 20.04% market share and has an AUM of Rs977bn. The company is riding on ULIP business (71% APE mix) which has lower regulatory risk, lower capital requirement and long term opex benefit, but also has lower margins and is highly dependent on capital market performance. SBI Life is increasingly focusing to improve pr

Well placed!

Multiple opportunities ensure sustenance of superior growth

* Over 2009-14, the staffing industry has grown at a CAGR of 20%. Estimates for the next five years maintain the high historical growth rate seen by the industry, which is possible with the confluence of favorable macroeconomic conditions and supportive

The August PORTfolio

* Indian Major Ports handled 52MT of cargo in August 2017, relatively flat on a yoy basis (decline of 5% mom). The major growth drivers were Containers (+6% yoy), Iron Ore (+16% yoy) and other liquids (+9% yoy) while Coal (-9% yoy) and Fertilizer (-16% yoy) witnessed a decline in August 2017

* Kolkata (+18% yoy), Vizag (+

By Suvashree Choudhury

MUMBAI - Business confidence among Asian companies fell for the first time in three quarters in July-September as escalating geo-political tensions outweighed an improved performance by most economies in the region, a Thomson Reuters/INSEAD survey showed.

The Thomson Reuters/INSEAD Asian Business Sentiment Index,, representing the six-

It is becoming really hard to be optimistic about the Indian economy. As T.N. Ninan pointed out last week, it has been six years since the economy breached the seven per cent growth rate mark. There have been repeated forecasts in these last six years of regaining those glory days of 2003-11, when India managed to grow at an annual rate of 8.4 percent.

But in every quarter, th

AUROBINDO PHARMA FY17

Aurobindo Pharma’s FY17 annual report highlights a year of moderating growth. EBITDA grew at 8% to INR34.3b. PAT grew faster at 12% to INR23b, aided by lower finance charges. R&D expenses at INR5.9b (3.9% of sales) remained the lowest among peers. FCF turned positive at INR15.4b (FY16: negative INR2.3b) despite high cap

The Indian government is seeking a dramatic increase in tourist figures, both foreign and domestic, in a way that it helps to earn more revenues and generate employment, new Tourism Minister K.J. Alphons has said.

"The number of foreign tourist arrivals was 8.8 million in 2016. We want to increase it dramatically. We also want to increase the number of domestic tourists, which wa

Trade deficit remains elevated at US$ 11.8bn in Aug’17, led by a sharper growth in imports vis-à-vis exports growth. Exports growth was concentrated while growth in imports was broad based. Growth in imports was mainly attributable to strong domestic consumption which is still not reflected in consumer durables production. India’s net services exports was elevated at US$ 5.8b

Key events/data releases during the week

* RBI balance sheet, reserve money and related updates (as of September 8) (Details in slides 4, 5, and 6)

* Notes issued: Rs15.6 tn (November 4: Rs17.7 tn)

* Currency in circulation: Rs15.8 tn (Rs17.9 tn)

* Initial estimate for net direct taxes for April-August indicates a growth

CAD at four-year high in 1QFY18

However, surge in financial inflows leads to USD11.4b addition to forex reserves

* India’s current account deficit (CAD) widened sharply to USD14.3b (or 2.4% of GDP) in 1QFY18, higher than our estimate of USD13.1b, but below market consensus of USD15.4b. Deterioration in CAD was led by a sharp rise in

Glenmark’s FY17 annual report highlights improved operating performance, with EBITDA rising 42% to INR20.4b on the launch of gZetia under six-month exclusivity. However, earnings-to-cash-flow conversion remains weak at 23% due to (i) increase in working capital requirements, primarily inventories, which increased by INR6.1b to INR21.4b (23% of revenue), (ii) higher cash taxes paid (at INR

CAD widens to 2.4%; risk to BoP getting elevated

Despite sharp widening in current account deficit (CAD) to a 4 year high of 2.4% of GDP, forex reserves surged by USD 11.4bn, significantly contributed by short term capital inflows. The momentum of debt inflows of USD 11.2bn in Q1FY18 was aided by fading of earlier Trumpflation trade that caused USD wea

The Indian outbound traveller is now a much-coveted commodity around the world, as the country's booming middle class seeks new destinations and emerges as a key market.

The Indian market has set a new record as 1.17 million tourists visited the US last year, according to Brand USA, the nation's first public-private partnership to promote the United States as a travel destinat

The curious case of the Indian market, Part 4.

We suspect the large ‘gap’ between the expected rate of return and required rate of return for retail investors may be driving the large inflows into domestic equity mutual funds. Retail investors perhaps expect high returns from the Indian stock market given decent returns in the recent past

•    Maha CM to inaugurate the two-day IACC conclave on Sep 18

Mumbai, September 15, 2017: Union Minister for Road Transport, Highways, & Shipping, Mr. Nitin Gadkari and Railways & Coal Minister, Mr. Piyush Goyal are among the host of dignitaries to address the two-day annual convention organised under the auspices of Indo-American Chamber

* Progress of monsoon: sub-normal to normal monsoon

–Till September 13, cumulative rainfall was 6% below normal with the weekly rainfall 31.4% below normal. On a regional cumulative basis, most of India was in deficient to normal rainfall with parts of central India and north India remaining deficient (slide 4). Out of the 36 sub-divisions across

August inflation doesn’t dampen case for rate cut

Monetary policy support necessary to revive weak economic activity

* With India’s retail inflation more than doubling from 1.5% YoY in June 2017 to 3.4% YoY in August 2017, it is broadly believed that the rate cut window has probably closed. However, details of CP

Inflation continues the uptrend.

Higher food prices and higher core inflation along with adverse base effect led to WPI inflation surging to 3.2% in August. We expect both CPI and WPI inflation to have bottomed out with CPI inflation inching towards 4.7% and WPI towards 3.6% by March 2018. We expect WPI inflation to undershoot the CPI trajectory from N

After the geopolitical tensios have cooled off, Indian markets have regained the growth momentun with the both Sensex and Nifty trading near its peak levels. Macros have continued to improve while foreign trade is showing signs of recovery. Indian markets are currently trading slightly at premium to its 10 year average, however with double digit corporate earnings growth and surging domestic eq

* IIP grew by 1.2% in July v/s (-)0.2% in June

* Improvement in the factory output was due to the rebuilding of inventories by businesses after the implementation of GST

* Manufacturing activity in July grew by 0.1% (-0.5% in June) with 8 out of 23 classified industries showed positive growth

* Mining grew by 4.8% (0.4% in June) and electricity at 6.5% in July (2.1